SOLD: Carolina Panthers for $2.3 Billion

Hedge Fund Manager and Steelers minority owner (5%) David Tepper has bought the Carolina Panthers for an NFL record $2.3 billion, subject to vote at the owners meeting in Atlanta next week, with the intention of keeping the franchise in the Charlotte area. The vote should be a formality as Tepper was vetted and approved when he acquired his stake in the Steelers; per league rules, he will have to sell his interest in the Pittsburgh NFL franchise. Franchise founder Jerry Richardson put the team up for sale in December after facing “me too” and racial misconduct accusations. Coincidentally, the announcement comes just one day after the SCOTUS struck down PASPA, the federal ban preventing individual states (save Nevada) from offering betting on the outcome of a single sporting event; likely already increasing the value of Tepper’s investment.

Howie Long-Short: $2.3 billion is the most ever paid for an NFL franchise but, below the $2.5 billion Richardson had hoped to get. Richardson’s desire for a quick sale, Tepper’s ability to pay in cash and the lack of a 2nd viable buyer all contributed to the depressed sale price. Prospective bidders Joe Tsai (Nets) and Michael Rubin (Fanatics) each bowed out of the bidding when told it would take an offer “substantially more than $2.5 billion” to buy the team and Ben Navarro’s $2.5 billion bid was made with the intention of moving the franchise to South Carolina; a term the league and Richardson opposed.

At $2.3 billion, the Panthers sold for less than 6x revenue ($385 million); a figure that’s only going to grow with legalized gambling and increased competition for media rights. While the deal was consummated prior to the SCOTUS decision, the outcome had been expected for months. Add any newfound betting revenues to the additional income expected from newly signed streaming rights deals (Amazon – worth $65 million/year, Verizon – worth $500 million/year) and there is no way the team generates less than $400 million in 2018. At 6x, the team is worth a minimum of $2.4 billion. Forbes, which is notably conservative with their franchise valuations pegged the franchise at $2.3 billion. It appears that Tepper got a good deal or at least one in line with the market, as opposed the deals signed by Joe Tsai (Nets, $2.3 billion valuation) and Tilman Fertitta (Rockets, $2.2 billion valuation) that defy logic.

Fan Marino: Panthers fans concerned Tepper would look to rebuild the team’s front office and coaching staff can rest easy. Both Head Coach Ron Rivera and General Manager Marty Hurney received positive reviews from Tepper’s colleagues in Pittsburgh. As a result, there are no plans to make any changes to football operations prior to the 2018 season.